McMillian Tire Company produces tires used on small trailers. The month of June

Question

McMillian Tire Company produces tires used on small trailers. The month of June ended with 500 tires in process, 90 percent complete as to direct materials, and 50 percent complete as to conversion costs; 4,000 tires were transferred to finished goods during the month, and 2,700 were started during the montyh. The beginning Work In Process inventory was 60 percent complete as to direct materials and 40 percent complete as to conversion costs.

Determine the denominators to be used in the calsulations of cost per equivalent unit for materials and conversion costs.

Material - $
Labor - $

Explanation / Answer

Tyres transferred as finished goods 4,000 Tyres at ending Inventory 500 Total 4,500 less Tyres started during the month 2,700 Begining Inventory of work in progress 1,800 Completion onequilent units Material Conversion cost Begining work in progress 720 1,080 Units Completed 2,200 2,200 Ending work in progress 450 250 Total 3,370 3,530 the denominators to be used in the calsulations of cost per equivalent unit for materials and conversion costs. Material - 3,370 Labor - 3,530

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